What will happen to the dollar in 2018
Officials and citizens disagreed on what will happen to the dollar in 2018. According to polls VTsIOM, the Russians are counting on a smooth strengthening of the ruble. The government considers the Russian currency to be over-secured, which has a negative effect on the domestic economy. As a result, the dollar will show moderate growth.
Expectations against economic reality
The April survey of Russians, conducted by representatives of VTsIOM, reflected the expectations of citizens regarding future trends in the foreign exchange market. According to the results of the survey, next year the dollar will be 58-59 rubles / USD. Despite this optimism, government forecasts are fundamentally different from the expectations of Russians.
As part of the forecast of the Ministry of Economic Development, next year, the dollar will approach the line of 70 rubles / dollar. Otherwise, the foreign exchange market will need more than $ 18 billion in inflows, emphasizes the head of department, Maxim Oreshkin. The Ministry of Economic Development predicts a reverse trend - next year the outflow of capital will be 8-10 billion dollars.In addition, a strong ruble will be a negative factor for economic recovery.
Representatives of the Ministry of Economic Development predict a recovery of growth of the Russian economy. Next year, GDP growth is expected to reach 1.5-1.7%, which is significantly behind the average growth of the global economy. Taking into account the long period of low oil prices, the domestic economy will reach a growth rate of more than 3% not earlier than 2020.
At the same time, inflation will reach the target value of the Central Bank - 4%. Over-strengthened ruble will lead to a slowdown in price growth to 2.8-2.9%, which will become a new challenge for business representatives. Another positive factor is that next year the growth of real incomes of the population will accelerate to 1.5%.
The most significant factor that will determine what will happen to the dollar in Russia in 2018 remains the future change in oil prices.
The oil market retains significant volatility, which is the main factor of uncertainty. Next year, experts are considering several scenarios for developments in the “black gold” market, which depend on the factors of demand and oil production.
Despite the signed OPEC + agreement, which has established oil production quotas, the market will need much more time to come to a balance.Previously, analysts predicted a shortage in the oil market in July-December 2017. However, the rapid growth of production in the United States and the recovery in supply from Libya and Nigeria impede the balance of the market.
The base forecast for the next year suggests a moderate increase in quotations to $ 50- $ 55 per barrel. This level of oil prices far exceeds the expectations of the Ministry of Economic Development, on the basis of which the budget for next year will be drawn up. As a result, the domestic budget will receive additional revenues, which will favorably affect the ruble positions.
The optimistic scenario expects an increase in quotations to $ 60 per barrel. In this case, the ruble will be able to avoid easing and will remain in the range of 60-65 rubles / dollar.
Excessive growth in oil production and the breakdown of the OPEC + agreement will lead to a pessimistic scenario. Growth in supply will put pressure on prices, analysts predict, which will be a negative factor for the domestic currency. As a result, the cost of a barrel can drop to $ 40, which will lead to a weakening of the ruble to 75 rubles / dollar.
An additional factor that will affect the dynamics of the foreign exchange market remains the further fate of sanctions and the development of relations with European partners and the United States.Also a risk factor is the excessive slowdown in the Chinese economy.
Sanctions under question and the Chinese threat
Geopolitical factors will continue to influence the Russian economy and the dynamics of currency quotations. Western sanctions limit access to cheap financial resources, which was previously the main growth factor. In addition, the implementation of large-scale energy projects remains in question.
After the inauguration of Donald Trump, many experts were counting on a gradual easing of sanctions by the United States and the transition of Russian-American relations to a pragmatic channel. However, the diplomatic scandal and disputes related to the interference in the presidential elections, returned to the agenda the expansion of US sanctions.
In such circumstances, the effect of sanctions will continue for 2018, experts say. In addition, the development of the conflict in Syria may lead to new contradictions between the United States and the Russian Federation. Also, the parties differently assess the confrontation in the east of Ukraine, which leads to additional tension.
Another threat to the Russian economy is the rapid deceleration of the Chinese economy, which cannot overcome the effects of the crisis. Sharp drawdown of the economy of the Middle Kingdom will put pressure on commodity markets.Including there will be a decrease in oil prices, which will affect the positions of the ruble.
Despite the expectations of the population, the ruble will continue to lose ground next year. The Ministry of Economic Development predicts a rise in the dollar to 70 rubles / dollar, which will increase economic growth rates.
The oil market can make its own adjustments. Depending on the movement of quotations, the dollar will fluctuate in the range of 60-75 rubles / dollar. In addition, Western sanctions and the dynamics of the Chinese economy remain significant factors.